US information technology giant HP aims to become one of the top three notebook computer vendors in the Chinese market next year, as its arch-rivals IBM and Lenovo are busy consolidating.

Isaiah Cheung, director of mobile business for HP's personal systems group in China, said the market research firm International Data Corp predicted the notebook market will grow by 19 percent year-on-year. But HP hopes to make faster growth than the market's average.

The US giant ranked fourth this year, after IBM, Lenovo and Dell.

The high-end enterprise market will become the top priority.

Cheung said his company will put a lot of resources into its high-end N series of products and release the first model for next year in January at a price of over 30,000 yuan (US$3,600).

The acquisition of IBM's personal computer business, by the biggest Chinese computer vendor Lenovo Group earlier this month, may prove good news for HP, an arch-rival of IBM.

"When HP and Compaq were merged two years ago, some of our customers left us, uncertain about the future of the new HP," said Cheung.

He added there may be similar customer uncertainty about the Lenovo-IBM deal.

Besides the high-end segment, the US giant will expand its product lines in every segment.

HP unveiled a 6,999 yuan (US$845) notebook model - the Presario M2000 - in Beijing yesterday, the cheapest model produced by the company.

Cheung said the model will be mainly targeted at the education sector, small and medium businesses, and consumers.

"We have been talking about desktop replacements in 2004, but the real changes will happen in 2005," Cheung said.

However, the release is not targeted at starting a price war with domestic vendors, which sell notebooks as cheap as 5,999 yuan (US$725), he said.

Cheung explained the fast growth of entry products as the main reason to launch the products, and that competition with international brands is more important.

HP's major international competitor Dell also released a model at 8,299 yuan (US$894) in China.

HP will release its first model developed in China for the Chinese market in 2005.

Cheung said HP has no intention to withdraw from the computer business.

US market research house Gartner said earlier this month three or four of the top 10 players including IBM and HP may give up their PC business.

HP, which just released its first smart mobile phone in the United States, is also considering entering the Chinese market.

In China, phone makers are required to own a licence to produce handsets and the Chinese Government did not release new licenses in the past two years.

However, some speculate the government will lift the restriction next year.

(China Daily December 23, 2004)